Native Ads vs. Display Ads

This guide explains the differences between native & display banner ads, in terms of effectiveness, revenue & when to use each type of ad.
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Believe it or not, display ads made their introduction into advertising as far back as 1994, but native advertising was only recently coined in 2011. Yet, both advertising methods play a significant part in the growth of your business — in different ways. The key is to know the value of each of the two, so you can choose the most suitable type for your campaign.

After all, knowledge is power in marketing and advertising. The more you know about using tactics like native ads and display ads, the better prepared you will be in leveraging them to the best of your advantage. 

What are Native Ads?

Native ads are the paid promotions you see on web pages, emails, and newsletters that blend in with the platform’s content, design, and flow. They are a form of contextual targeting, given this name because they’re designed to blend in with their surroundings. Native ads are much more subtle than display ads, blending in with their surroundings and being less noticeable as an advertising effort. This form of advertising has become extremely popular in recent years as more people have become susceptible to ‘banner blindness,’ referring to the act of intentionally blocking out banner ads using ad-blocking tools, due to the annoyance of seeing them everywhere.

The biggest appeal? They don’t look like ads at first. They’re more content-based and less intrusive for consumers. 

What Does a Native Ad Look Like?

How your native ads show up depends on the platform you’re using them on. Namely, it depends on the design and purpose (i.e., email, social, blogging content, etc.). From there, you can switch it up.

You’ll find native ads in the form of banner-style ads that match the content you’re reading on website pages and blogs. Take, for instance, The Onion’s native ad, “Woman Going to Take Quick Break After Filling Out Name, Address on Tax Form.” The content was made specifically for their client H&R Block, and it brought about many laughs in response. 

On social media, it often shows up as a suggested post to read or view. A good example would be Patron Tequila’s Twitter native ad, promoting their restaurant on Margarita Day by “prompting users to help vote for one of 7 innovative cocktail recipes.”

You’ll also see them in emails with fewer promotional images and more modest text promotions. Outbrain uses their own example of a ‘pretty plain’ promotional email that “achieved a 5% increase in delivery rate, 10% increase in open rate, and 3% increase in click rate.”

Finally, you’ll also see them in discovery ads that target your audience with written and video content that matches their interests. This can be in any content form — written, video, image — but was particularly successful for Oreo’s native ad video, “Game of Oreos.” A play on the hit HBO series Game of Thrones

What are Display Ads?

Display ads are a very graphic form of advertising often found on websites, apps, and social media. They can be found in various forms, including videos, images, texts, flash, and audio. Their purpose is to deliver a brand’s message to the visitors clicking onto the page. 

Many main features of a display ad are animated content that aims to engage audiences, including a call-to-action that urges the visitor to take immediate action. It started as a colourful and simplistic banner ad, like that of the very first one made by HotWired in 1994 for AT&T internet. Today, they involve more content and include more brand-specific promotional information. 

The amount of display ads delivered has also evolved, increasing to 63 display ads per day. This high frequency has led many consumers to feel overwhelmed and annoyed with display ads, often saying they feel ‘followed’ by them.

What Does a Display Ad Look Like?

Display ads can take on several shapes, sizes, and forms. This could mean they’re a video ad, interactive, animated, static (an image that isn’t moving and often has promotional text in it), or expanding (starts small and gets bigger). One thing that remains the same, however, is that they will stick out significantly from the platform’s page and are designed to attract your attention immediately. 

Some great examples of display advertising include Coca-Cola’s “Makings People Feel Good” display ad campaign and IBM’s “Use Education to Drive Revenue” display ad campaign. 

Coca-Cola’s display ad told viewers to send a Coke across the world to someone they never met to “share a little happiness.” This was incredibly successful since it was integrated with other strategies connected to an app that would even show you that the coke made it to its destination.

As for IBM’s display ad, that inspired education and learning with the brand. Better yet, they used the ads to promote free content, so the added incentive was more than welcomed by visitors. Here, they used interactive display tactics by inviting the consumer to “think” and then allowing them to click on each letter for more on the topic. 

Native vs. Display: Key Differences

While both native and display offer a chance for growth and brand awareness, there are some very important differences to keep in mind regarding the look, success, and purpose of each:

  • Appearance — native ads fit in with their surrounding, while display ads are made to stand out from the site’s content. 
  • Campaign type — display ads are more useful for campaigns aimed at retargeting their customers, while native advertising is great for campaigns that aim to drive traffic. 
  • Click-through rate (CTR) — native ads have higher CTRs than display ads by as much as 0.3% in many cases. 
  • Cost per click (CPC) — display ads have much more inexpensive CPCs than native ads.
  • Device type — native ads are more popular on mobile phones, while display ads do the best on desktops.
  • Quality of traffic — native ads are integrated into content the visitor actively seeks and is interested in, while display ads are put anywhere that has potential. This makes for a much higher quality of traffic in native advertising than display. 

Which is More Effective?

According to Daily Blogging, research has shown a rise in effectiveness, leaning more towards native advertising over display ads. In fact, their report revealed that in comparison to banner ads, native advertising:

  • Registered 18% of lift in purchase intent.
  • Received 25% more respondent visibility.
  • Saw a 9% lift for brand affinity.
  • Was considered sharable on social to 32% of consumers (display ads — 19%).

Research has also found that native ads are viewed 52% more often than display and make up for more than 74% of ad revenue. Outbrain adds that native ads have higher click-through rates (CTR) with an average of 0.2%, are more effective on mobile (display does better on desktop), and are more expensive cost per click than display.

As for audience preference, AppSumurai found that more than 32% of survey respondents said they would share native ads with their friends, compared to 19% for display ads.

It’s important to note that while research shows a preference for native advertising over display advertising, the truth is, different situations require different ads. More often than not, companies use a nice mix of the two marketing tactics. 

When To Use Native Ads

When you use native ads in your strategy depends on your purpose, goals, and the audience you’re trying to reach. For instance, native ads are more suitable for:

  • Brands with a niche targeted audience.
  • When the target audience can be found on a handful of sites.
  • On pages where users tend to engage with the content (quizzes, surveys, social media).
  • When your strategy involves increasing loyalty.
  • When you want people to share your content.

When To Use Display Ads

On the other hand, using display advertising can be beneficial for your brand and business in other ways. Situations where display ads are more

beneficial/effective include:

  • Highlighting more visual content
  • When you’re trying to reach multiple market segments.
  • When the primary goal is retargeting.

Display Vs. Native Advertising

Trends are indeed showing favour of native over display in many areas of advertising, especially now that the younger generation is taking over as the majority of consumers. In fact, research has shown that regarding native ads, around 80% of millennials see in-feed native ads as a favourable user experience and 58% believe that publishers should limit advertising to native only.

The truth is, a mix of native advertising and display is the best approach for any business looking to grow. Here at Passendo, we recommend starting with native to drive relevant traffic to your website/content and then following up with display ads for a more tactical message to the same users.

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